Liberation Group has seen drinking behaviours “return to normal” in recent weeks, as customers resume old habits and head back to the pub for more wet-led occasions.

Chief executive Jonathan Lawson tells MCA that the high like-for-like drinks sales on its mainland estate showed how customers who have stayed away post-pandemic have begun to come back.

In a recent trading update covering 37 weeks from 15 May 2022 to 28 January 2023, managed UK LFLs were +4.5%, with drink +12.2% and food -2% (not adjusted for VAT).

Lawson says the food decline was against a particular strong comparison, which was part of a trend of food-led occasions associated with covid restrictions.

“I don’t see it necessarily as a pattern of wet led occasions,” he tells MCA. “I think it’s the unwinding back to what I call more normal behaviours in pubs.

“If you look at the pandemic and the way that we reopened in the last of the lockdowns, a food experience was protected and allowed to restart more quickly than drinking was. When we reopened we saw a real surge in demand for food occasions, we saw that last season and the year before.

“It’s taken a while for drinking occasions to get back to normal. What our trading reflects is food is still doing very well against very strong numbers, but drink is beginning to really come back.”

Lawson says this trend was reflected across the estate, and in his conversations with GMs. As a result, he is looking at investing further in drink-led experiences.

“I think some drinkers who had some time off during the pandemic potentially stayed at home a little longer, they are now back enjoying the pub environment.

“We have always said we run local pubs but with a destination quality offer, so we appeal to both markets. That local market is really coming back quite strongly, which is great to see.”

Driving higher EBITDA

Another notable feature of the trading update was the group has driven higher EBITDA per site in its tenanted estate.

Average EBITDA per tenanted pub is now £94.6k vs £90.2k in year ended January 2020.

Lawson credits this to a number of collective pieces of work which have driven profitability.

“For a while I’ve said that our pubs need to get bigger,” he says.

“Both managed pubs and tenanted pubs, when you look at the pressures that they are under from a cost point of view, need to get bigger as an amenity to drive a higher average weekly sales to be able to recover that level of cost base.”

In recent years, the group has been focussed on adding rooms and external trading areas to drive weekly sales, Lawson explains.

Meanwhile divestments, around 16 over the last four years, have been made where it was not possible to add new revenue, or if those assets “diluted the quality and the averages of our overall estate”.

Acquisitions meanwhile are always aimed at being “accretive to our averages”.

“We’ve managed our estate very carefully over the last few years,” Lawson says. “We’ve invested in a significant proportion of the spaces – all of that has been aimed to drive and raise the quality of our business and the output of all of that is the averages.”

Integration of Cirrus

Liberation Group announced an agreement to merge with Cirrus Inns just before Christmas on 16 December, with work kicking off on the integration on 3 January.

Lawson says he is delighted with this process, which was “bang on schedule”, crediting to the existing and new teams for adapting to so much change so quickly.

The group has changed the back-office systems, introduced a new offering on drinks, new food, new websites and new marketing.

The Cirrus pubs come under the Butcombe brand, though he described the changes from a customer point of view as “relatively low key”.

“One of the reasons for the combination is we felt there was a lot of commonality in our views on pubs, and what a great pub should be.

“Butcombe is the name above the door, but even in our existing estate, that branding is quite low key.

“We do believe in the ability of pubs to drive equity for the brewing brands, and vice versa, but we run premium pubs, so we certainly don’t ram brands down people’s necks.

“It’s quite subtly in the background.”

With a new estate in Southwest London, Lawson says the capital is “increasingly coming back”, with the deal representing great timing.

“We’re delighted with how well our offer has landed. We tweak the food offer to reflect that we’re in London and we have a number of urban sites.

“I’m delighted with how well the Butcombe brands have travelled, there’s a relatively high level of awareness of it in London.”